19 June 2009

Microsoft: 'We touch every piece' of auto business

If you’re a first responder, which would you prefer to use to get to the site of a car crash? Google Earth? MapQuest? If you work for OnStar, Microsoft’s Virtual Earth is now the preferred choice.

Last week, OnStar announced that it now uses Microsoft Virtual Earth for its automatic crash response advisors, choosing the tech over its previous MapQuest system (pictured below right, in pale yellow).

(If you’re unfamiliar, OnStar is a General Motors-owned subsidiary that provides live, on-call security and emergency services to GM vehicles. You can tell if a vehicle has OnStar by the little blue button in the cockpit and the monthly bill in your mailbox.) I spoke with David Graff, Microsoft‘s U.S. Automotive Industry Solutions Director, about why OnStar chose them and what the future holds for automotive safety and GPS. I also spoke with OnStar’s Scott Kubicki, vice president of subscriber services. about why OnStar chose Microsoft.

ZDNet:How does OnStar use Microsoft Virtual Earth? Graff: The Onstar reps on the other side of the blue button are using it. There’s GPS associated with the vehicle itself, and from a bird’s eye view you’re able to (pictured below right, in green). If they crashed in a ravine, you can see exactly where the car is located.

ZDNet: What does Microsoft Virtual Earth offer first responders that MapQuest and Google Earth do not? In other words, why Microsoft? Graff: What’s nice is that you can develop applications on top of Virtual Earth. Integrating GPS to locate the car, From a cost and development standpoint, it’s very efficient. Based on those two attributes, I believe that’s why we won out.

At CES over the past couple of years, [Ford CEO] Alan Mulally got on stage and talked about the new services coming through Sync (Ed’s note: Microsoft Sync is a data synchronization platform that has been deployed in Ford vehicles). That’s unheard of, to have an auto industry CEO up there on the stage at CES. [With Sync,] you’re upgrading your platform in the vehicle. It’s the first time you can go into a dealership, they flash the latest version of sync with the latest services, and they actually change the features in the vehicle. They put Sync on some of their entry-level vehicles — you don’t see a lot of telematics in entry-level vehicles.

Some of the features of Sync include Bluetooth hands-free operation, voice-activated digital media, and in the latest version you’ll have E991 assist: if the airbags activate, you get a call to an emergency operator that would notify a local ambulance group. You can also get a health report of the diagnostics of the vehicle, sports, weather, turn-by-turn-navigation, and so forth.

ZDNet: Why is it important for Microsoft to be in my car?Graff: It’s important for Microsoft to be in your car much like we’ve done with the PC. What we offer is a very affordable platform for you to develop services on top of. It would be outstanding to customize my vehicle through services, and those services are available through a platform like Sync.

If you look in the enterprise, we’re all over it from a productivity standpoint. Microsoft Tag, which is like a barcode, lets you wave your cameraphone over the barcode and it automatically goes to website with specs on that car model.

We’re customizing your car’s services. With studies we’ve done, Millenials research cars like crazy, and when they go to the dealership, they don’t even care to work with a salesman, they’d rather use a device to get information about the car. That’s where Tag comes in — I can just tag my favorite websites to that car.

ZDNet: What does Microsoft’s existence in the auto industry do for the business? Graff: Whenever we talk to an automotive executive and lay out our vision, they’re all very surprised.

There are plenty of auto-related advertisement opportunities: the portal itself (MSN), you can advertise through Hotmail, through Messenger, we have an alliance with Facebook, you can advertise in Xbox Live.

Inside the vehicle, the big question is: will it be services advertising or through a fee? That’s really directed by the OEM, and it’s still a struggle. The way that we view it in the long run is that your car will be customized through services.

ZDNet: Let’s go back to the OnStar announcement. Don’t we all use the same GPS system? Why is Virtual Earth a better choice? Graff: It’s not a difference of accuracy, it’s a difference in the bird’s eye view that Virtual Earth offers. The difference is in the rendering. (Image below, right: “high-level” view in Virtual Earth.)

ZDNet: What’s in store for plugged-in autos in the future? Graff: Well, there’s AutoConnect, an offering that makes your car a Wi-Fi hotspot.

Ford Works is offered for the F-Series that helps you track your fleet, RFID for tools, connection to Internet for ordering, etc. Once I hit the site, I’m totally physically connected through the vehicle itself.

Car2Go is through the Smart car and they’re piloting this in Austin, Texas for the fall and it’s a concept where I can locate a car and run a car for a day. That’s built on top of a Microsoft platform. (Ed’s note: this is a tech-savvy approach to the ZipCar business model in New York.)

You’re starting to see these different type of business models make their way into the vehicle. When it comes to electric vehicles, what if I’m plugged into the grid and I’m totally connected at all times and I can get to any of my content that’s located at home and bring it into the vehicle? As you start to see these networks get robust — 3G, 4G — I can access my content at any time in the vehicle. I see Microsoft in that arena.

ZDNet: What about security? If your car is always plugged in, it seems like you are at risk of being remotely hijacked. Graff: Right now entertainment systems are separate from drivetrain controls. Those are run on separate ECUs in the vehicle. [Security] is very much a concern at the OEMs. They want to make sure that it’s secure and safe; that it’s not going to affect the performance of any vehicle.

One area of assistance is driver distraction. Voice recognition is becoming so good that voice activation is going to be the key to services in the vehicle. That to me is much safer than driving 60 miles per hour and trying to answer a text message, which we’ve all been guilty of at some point.

But security, the OEMs are all over that. It’s a number one concern, especially with the advent of new powertrains: hybrid, electric. Electric vehicles are almost like a PC in their own right. Probably we’re going to see a change in services and business models — with the flush out we’re seeing today — it’s going to accelerate in 10 years like nobody’s business. It’s a tough time, but it’s a super exciting time.

ZDNet: What distinguishes Microsoft in the auto industry? Graff: We surround this business. I don’t know another software company that can say — we’re all over the enterprise, manufacturing, sales, marketing — we’re in the vehicle. We’re a huge piece of attracting the consumer. And you also have applications that are applicable to the dealership. From a high-tech perspective, I don’t know another industry where Microsoft is as engrained. We touch every piece of the business. $13 billion a year in research, all relevant to various facets of the automotive industry.